Are Gilead's Fortunes About To Change — Without An Acquisition?

Gilead Sciences' (GILD) fortunes are likely to change this summer on the expected approval of a key hepatitis C drug regimen and after the No. 3 biotech unveils Phase 3 data from an HIV trial, an analyst said Friday.

XYear to date, Gilead stock is down 3.3% as of Friday's close. Shares declined as much as 10.5% to the year's low of 64.12 on June 16, but have since recovered somewhat amid a biotech rally that saw the sector rise collectively to a 17-month high in late June. Gilead stock was off marginally to 69.25 on Friday.

Needham analyst Alan Carr lists Gilead among the biotechs with "potential for upside around specific events." The upside is sorely needed for Gilead which is struggling with a decline in its hepatitis C franchise as the U.S. and European markets mature.

Following that decline, Gilead has identified its HIV drug known as bictegravir as its next big hit. In July, Gilead is expected to unveil Phase 3 data for bictegravir during the International AIDS Society conference in Paris, Carr said in a note to clients.

In August, the Food and Drug Administration is expected to approve Gilead's combination of sofosbuvir, velpatasvir and voxilaprevir in chronic hepatitis C patients who have failed specific prior treatments. The regimen is a 12-week treatment.

Other analysts have suggested that Gilead should make an acquisition to bolster its pipeline. The company has indicated it would like to explore a merger in oncology, fueling rumors that it could be looking at Tesaro (TSRO) or Incyte (INCY).

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Alnylam is expected to have Phase 3 data for its drug, patisiran, in September. Patisiran is being investigated as a potential treatment for a rare disease that causes abnormal buildup of material called amyloid within the tissues. These deposits can damage the organs.

If approved, patisiran will rival drugs from Ionis Pharmaceuticals (IONS). Ionis is currently working on a trial of its drug, inotersen, in a population of these patients. That study should help provide proof of mechanism for both patisiran and inotersen, Carr said.

Later in the third quarter, Intercept is likely to announce Phase 2 results of its drug Ocaliva as a treatment for a disease that causes inflammation and scar tissue on the bile ducts. It can ultimately result in liver damage. Ocaliva is already approved to treat a similar liver disease.

Neurocrine's second-quarter earnings will, for the first time, include sales from its drug Ingrezza, approved in May as a treatment for involuntary movements associated with long-term use of certain medications. Carr models $800 million in sales for the period.

Also in the second quarter, Carr estimates Vertex will bring in $186 million and $294 million in sales of Kalydeco and Orkambi, respectively. Kalydeco and Orkambi are cystic fibrosis drugs for patients with specific genetic mutations.

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